Atal Pension Yojana vs. Fixed Deposit


Atal Pension Yojana vs. Fixed Deposit

Well, both Atal Pension Yojana and Fixed Deposit are two different tools of investment, providing different rate of interest, proving separate intent and catering to a different segment of investor.  While Atal Pension Yojana ensures a financially hassle-free old age, fixed deposit simply grows your money at a set rate of interest.  In this article, we would compare both the investment tools and talk about their differences in brief.

Who can apply?

Any Indian citizen or Non Resident Indian can apply for Atal Pension Yojana, provided they are between the age group of 18 to 40 years.  On the other hand, there is no such age limit set for opening a fixed deposit for anyone.

Atal Pension Yojana vs. Fixed Deposit

In terms of Intent of Investment

The intent of investment for both the schemes is way too different.  Atal Pension Yojana ensures that you contribute whatever less you save every year and get a fixed pension after you retire.  However, fixed deposit calls for any investment that you have in lump sum and wish to deposit it in one go to get a fixed amount after a fixed tenure.

The difference in objective of investment

The objective of Atal Pension Yojana is to create a corpus for your old age wherein you get a fixed income every month, once you retire.  On the other hand, the objective of FD is to grow your money at a decent rate of interest, and double it in some cases after a certain number of years.

Where to open accounts

You can open both Atal Pension Account and fixed deposits in most of the public sector banks and post offices.

The Government’s Contribution

There is a contribution of Rs 1,000 or 50 per cent of the amount of contribution from government side if you are contributing in APY.  On the other hand, there is no such contribution from government in case of fixed deposit.  There could be certain special fixed deposit schemes floated by the bank, however they are not entirely backed by the government.

The age for getting returns

The age after which you start getting your returns in Atal Pension Yojana is 60 years.  That is the age when most of people retire.  In case of fixed deposit, there is no age of getting returns.  As a matter of fact, there is just a period after which you get a fixed amount out of your investments.

Both Atal Pension Yojana and Fixed Deposits are tools of investment and ways to secure your future.  However, the way they do it for you are a little different from one another.  On one hand, APY is a government backed scheme, whereas on the other, FD is a choice that you can make on the spare money that you have in hand.

Other Articles

  1. Age Limit APY
  2. Government Contribution
  3. APY Calculator
  4. How to Join APY